Gold prices down to USD 1,921/ounce - report
KUWAIT, June 25 (KUNA) -- Gold prices dipped at the end of last week's trading, to close at USD 1,921 per ounce, recording losses for the second week in a row.
Gold prices ended trading last Friday in reduction of their weekly losses, with continued expectations of monetary tightening from central banks, rebounding from its lowest level in three months at USD 1,910 an ounce, which it touched earlier in the year, the Kuwaiti-based company Dar Al-Sabaek said in a report Sunday.
The data had investors fearing the next big economic downturn, as the latest Purchasing Managers' Index (PMI) figures showed that manufacturing sectors in the US and Europe contracted at a much faster-than-expected pace and growth in services slowed, the report added.
Head of Dar Al-Sabaek's strategic planning Adel Al-Fadhli said, according to the report, that initial unemployment claims exceeded market expectations and reached their highest levels in 2021.
US Federal Reserve Chairman Jerome Powell stressed the need to continue raising borrowing costs and interest rates despite the noticeable slowdown in the economy and the decline in the labor market, Al-Fadhli stated.
Gold was down during last week's trading with the central banks proceeding with the monetary tightening cycle, especially after the statements of Powell before Congress, in which he affirmed commitment to reducing inflation to its target of 2 percent and raising interest rates, which increased the dollar's gains, he mentioned.
President of the Federal Reserve Bank of San Francisco Mary Daly reinforced the statements, as she said that two interest rate hikes this year are a very reasonable expectation, noting that the financial markets favor the US Federal Reserve's tendency to raise interest rates by 25 basis points at the next monetary policy meeting next July, he indicated.
High interest rates, large debt burdens and high inflation are factors that could lead to the outbreak of a financial crisis. Once a credit contraction occurs, it can enter into a situation like 2008, Al-Fadhli said.
The upcoming meeting of Brazil, Russia, India, China and South Africa (BRICS) group next August, which aims to use a common currency, will affect the strength of the dollar due to the Western response to the Russian-Ukrainian war in 2022, which included banning Russia from the SWIFT international payment system, he pointed out.
The developments in Russia regarding the Wagner Group will directly affect the opening of the markets on Monday, he mentioned.
Gold futures for next August delivery rose by 0.3 percent, or the equivalent of USD 5.9, to reach USD 1,929.6 an ounce, reducing losses for the second week in a row at 2.1 percent, while the dollar index, which measures the performance of the US currency against major currencies, increased 0.50 percent with 102.87 points, he noted.
Regarding the local market, he mentioned that the price of a 24-carat gram gold amounted to KD 19.15 (about USD 63), while the 21-carat gram was KD 17.55 (roughly USD 58), whereas the silver price was KD 268 (approximately USD 884.5) per kilogram. (end) st.lr.
